Sweden is the latest country to propose a major VAT cut for the sector, in a move that adds further pressure on the UK Government to act.
Sweden’s Government has proposed cutting VAT for the restaurants and catering services from 25% to 12% in its 2012 Budget, in a move expected to cost 5.4bn crowns (£520m).
“The proposal is expected to increase employment, reduce administrative costs and cut prices in the restaurant sector,” Sweden’s Government said in a statement.
Sweden follows Ireland in looking to slash VAT to help its hospitality industries. VAT in Ireland was cut from 13.5% to 9% in July and the rate is set to remain until December 2013.
It comes as the hospitality industry in the UK campaigns to reduce VAT for the sector. The Publican’s Morning Advertiser, sister title to M&C Report, has lodged a petition for VAT for be cut to 5% for hospitality business.
More than 3,000 people have signed the petition to date. It can be viewed here: http://epetitions.direct.gov.uk/petitions/1198
Earlier this month Treasury minister David Gauke promised to look at the arguments for cutting VAT for the hospitality sector, but stated reasons why it would be difficult to reduce the level.
